Many important biological processes are regulated by protein tyrosyl phosphorylation, which is controlled by protein-tyrosine kinases (PTKs) and protein- tyrosine phosphatases (PTPs). Abnormal regulation of these pathways can lead to developmental abnormalities and diseases such as cancer. A complete understanding of cellular regulation by tyrosyl phosphorylation requires defining the PTKs and PTPs involved and determining how they interact. Such understanding is needed to develop new agents that selectively target elements of these signaling pathways, agents that may be useful for the treatment of human disease. The goal of this research program is to define the biological function and mechanism of action of an SH2 domain-containing PTP, SHP-2. SHP-2 is required for normal development of frogs and mice, and acts within a number of important signaling pathways, including PTK pathways regulated by growth factors and extracellular matrix. However, its detailed functions remain to be elucidated. First, they will further define the role of SHP2 in early vertebrate development, using Xenopus and mouse models. The Xenopus studies will employ dominant negative SHP2 mutants, along with novel "activated" SHP2 mutants. In the mouse studies, they will characterize the embryonic lethal phenotype of SHP2-null, Exon-2 deleted mice. Using genetic analysis, we will then determine whether and how SHP2 acts as a limiting component in RTK signaling by asking how/whether decreasing SHP2 dosage affects mice with defective EGFRs (waved-2), and mice which overexpress TGF-a in their mammary epithelium (WAP-TGFa). Using reverse genetics and cell lines derived from SHP2 mutant mice, they will delineate SHP2's role in integrin signaling and RTK signaling. The mechanism by which the SHPS1/SHP2 complex regulates fibronectin-induced signaling will be determined and the direct targets of SHP2 in EGF receptor and FGF receptor signaling will be defined. Finally, by monitoring the biological activity of chimeras between SHP2 and its relative, SHP1, in Xenopus mesoderm induction, they will determine how/why these two highly similar PTPs have such distinct biological roles. The results of these studies should yield new insights into how tyrosyl phosphorylation is controlled and, in particular, how PTPs contribute to its regulation. In addition, their studies may reveal SHP2 to be a good target for therapeutic intervention in human tumors with elevated EGFR activity.